Energy transition: an evolution or a revolution?

The energy transition is the evolution towards a new energy mix, ie towards a new portfolio of technologies for the production of final energy, the form under which we consume, we use energy.

In most countries, as a consequence of the Kyoto Protocol and more recently of the COP21, energy transition means the introduction of renewable energies, including, but not limited to, intermittent renewable energies (solar photovoltaic, wind). These renewable energies find their sources in local reserves and potentials (sunshine rate, wind regime, biomass reserve, geothermal potential, biogas potential from agriculture or waste treatment); they give rise to the construction of local production plants, close to the sources of energy. Some renewable energies, such as biomass and geothermal, are particularly suitable for supplying heat networks. The latter are infrastructures supplying small perimeters and their development reinforce the local character of renewable energies.

Through the evolution of the energy mix, the energy transition means also the relocation and decentralization of energy systems. The energy transition thus leads to a rise in power of local actors and decision-makers. These actors and decision-makers, operating local energy systems, managers and territorial energy coordinators, are now in a position to influence the evolution of energy systems. The major national players, verticalized and specialized, can no longer be the only decision-makers. It is necessary for them to strengthen their proximity to cities and regions, and to coordinate with local actors.

The energy transition is thus also a profound change in the governance of the energy systems and of each of their components. I have already mentioned the fact that renewable energies such as biomass and geothermal power make it possible to supply heat networks. Being, energetically speaking, more efficient than individual installations, these networks of heat (and of cold) are called to develop. This progressive “centralization” or sharing of thermal systems in urban communities favours in some countries the decrease of electricity as a source of energy for thermal applications.

The energy transition, therefore, is also the evolution of the applications served by electricity. The introduction of intermittent renewable energies upsets the balance of power networks. Electricity consumption is no longer the only hardly predictable component. Solar and wind productions are now variable and difficult to predict. New mechanisms are needed to maintain the frequency and balance of these networks. These mechanisms combine storage, production modulation and consumption modulation solutions. They will most likely have to be deployed on different sizes of territory (supranational, national, local) and at different time horizons.

Some storage technologies like Power-to-gas, some production technologies like cogeneration, create links between energies, that previously did not exist.

The energy transition is also a fundamental evolution of how energy systems are operated. We all know that the energy transition must respect the fundamentals of any energy policy: energy cost, energy availability, the environmental impact of energy, energy independence.

The energy transition means maintaining a balance throughout this transition between the speed imposed by environmental objectives and the prudence or time imposed by the requirements of cost, availability and independence.

In view of these few reflections, the energy transition, although often presented as a simple evolution, is indeed a real revolution.

In all countries, the energy transition will take time. It will be a real journey for the entire national energy ecosystem and will require a regular and coordinated evolution and adaptation of both the regulation and the actors. These essential adaptations hide major stakes: certain important players, previously protected by a monopoly situation, will have to define a winning strategy in this new landscape, a delicate exercise, hitherto unknown to them. On the other hand, the legislator will also have to be flexible by adapting quickly laws and regulation to each phase of this transition. This will require a strong and continuous connection to the needs of the ecosystem, great adaptability and short reaction times. The era of the framework laws defining the energy market for 20 years is over.

The energy transition reveals a major ambiguity: the slow evolution of energy systems suggests that we have time. However, the importance of the action plan and the depth of the revolution to be carried out leave no freedom. The energy transition is, for all countries, a project to start quickly and to conduct with constancy. In theory, the objectives of cost, energy independence, reduction of environmental impact, are apolitical and have no reason to be called into question. The energy transition can and must be carried out independently of the uncertainties of the political life.

In order to carry out such a revolution, it seems essential that each country should have a national coordinator, both institutional and business in profile, with a clear mandate to establish the necessary links between all actors, to coordinate the evolution of the regulatory mechanisms, the evolution of the players in line with the evolution of the markets. This will probably be the way for the energy market revolution not to become a revolution in energy markets.

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Who is Eric Morel?

Eric Morel advises energy executives and their teams throughout the world. Specialised in energy transition and digitisation, he provides value to his customers for their business strategy and their innovative projects management. He has been involved in Smart Grids developments since 1999. He is also a keynote speaker and a teacher for MBA students. For more details: www.machnteam.com

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